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Bush budget axes program for small businesses

Few things can be called small in Big Sky Country, but when it comes to factories—that is, those employing less than 500 people—virtually all of Montana’s manufacturers fit the bill. Providing some 28,400 jobs in Montana’s work force, they typically pay wages significantly higher than the statewide average.

But if the Bush administration has its way, a program that’s been proven to help Montana manufacturers become more productive, cost efficient and profitable will soon fall by the wayside.

The Montana Manufacturing Extension Center (MMEC) is a statewide outreach and assistance center based at Montana State University in Bozeman. Part of a nationwide network of nonprofit organizations known as the Manufacturing Extension Partnership (MEP), MMEC helps small manufacturers in a variety of ways, from redesigning their manufacturing floors, to searching for hard-to-find supplies and equipment, to cutting down on wasted materials and repairs, to helping firms better understand how their internal costs should be reflected in the price of their goods.

For example, when Quality Products of Montana, a Missoula business, needed a special polypropylene plastic for a dental tool sterilization bag, MMEC helped them find it, overcoming a 10-year research-and-development hurdle. And when Northern Specialty, a Missoula-area firm that makes plastic pipe fittings for municipal waterworks and sewer systems, found leaks in its product costing and price structure, MMEC helped fix them, resulting in a 25 percent turnaround in its profit margin. MMEC has assisted other Missoula-area businesses as well, from Hunter Bay Coffee Roasters in Lolo to Sirco Manufacturing, which makes modular office and computer furniture.

Unfortunately, the proposed Bush budget all but eliminates the MEP program—created under the Omnibus Trade Act of 1988 under President Reagan—arguing that those services should be privatized.

“There’s been a groundswell of manufacturers saying, ‘Please don’t cut this program,’” says MMEC’s Debbie Nash. As Nash points out, MMEC has been a huge boon for manufacturers in Montana, where 80 percent of all businesses have less than 20 employees. A one-year analysis of the program revealed that MPE clients increased their total sales by $4.5 million, saved more than $500,000 and spent $1.2 million in modernizing facilities. Likewise, a study by the Montana Bureau of Business and Economic Research found that MMEC helped Montana firms add 304 new manufacturing jobs in only two years.

Ironically, the Bush budget would eliminate a program that’s been as lucrative for the federal government as it’s been for Montana businesses. MEP estimates that its programs return $4 to the federal government in tax revenues for every $1 of federal funds it invests.